TLDR
- ADA is trading around $0.24 after a two-week correction
- Whales accumulated 230 million ADA tokens between Wednesday and Monday
- The long-to-short ratio sits at 1.14, showing more traders are betting on a price rise
- ADA remains below key moving averages, with RSI at 41 signaling weak momentum
- Analyst Ali Charts flagged a channel breakout, pointing to a potential drop to $0.22
Cardano (ADA) is currently trading at approximately $0.24, marking a slight recovery after enduring a two-week downward trend. However, this upward movement does little to offset a more than 4% decline over the past week, with technical indicators maintaining a bearish outlook.
Despite the lackluster price action, on-chain analytics suggest significant accumulation efforts by larger holders. Data reveals that between Wednesday and Monday of last week, wallets categorized as whales—those holding between 100,000 and 1 million ADA, along with those holding 10 million to 100 million ADA—gathered a total of 230 million tokens. This trend suggests an undercurrent of optimism among significant players in the market.
Conversely, wallets in the 1 million to 10 million ADA bracket appear to be offloading their holdings, with approximately 30 million tokens exiting this tier. This trend could signify capitulation among that particular cohort.
On the derivatives front, the long-to-short ratio for ADA has spiked to 1.14, indicating that more traders are positioning themselves for a potential price increase. Similar sentiments are reflected in the slightly bullish tilt shown in the market by CryptoQuant data, which highlights increased activity among large whale orders in both spot and futures markets.
Technical Picture Stays Weak
Despite the accumulation by whales, the technical landscape for ADA remains cautious. The cryptocurrency is trading beneath its 50-day and 100-day exponential moving averages, both of which are showcasing a downward trend.
The current Relative Strength Index (RSI) stands at 41, suggesting weak momentum without entering oversold territory, while the MACD has fallen below both the signal line and the neutral mark, exhibiting signs of renewed downward pressure.
Immediate support for ADA is pegged at $0.23. Should this level break, investors may see a decline towards $0.22. Conversely, resistance levels are identified at $0.26, with a substantial barrier around $0.29.
Analyst Flags Channel Break
Crypto analyst Ali Charts has indicated via social media that Cardano has ostensibly broken out of its established price channel, hinting at a potential drop to $0.22. This insight came approximately 12 hours ago and aligns with the broader bearish indicators prevalent across multiple metrics.
ADA was seen testing support levels near $0.237 after encountering resistance around $0.275 earlier last week. Notably, the Chaikin Money Flow indicator has sunk deep into negative territory, signaling a significant outflow of capital from the asset.
Repeated tests of the $0.23 to $0.24 support zone are gradually eroding its strength. A breach of this zone could lead ADA towards the next major support level at $0.20.
The shifting landscape of Cardano underscores the complexities of the current crypto market climate, emphasizing the dichotomy between accumulating whales and the bearish indicators causing traders to tread carefully.
